Karachi September 9 2023: The government regulations of Pakistan mandate that all individuals, including citizens of Pakistan and foreigners residing in the country for at least six months, who acquire foreign exchange, whether within Pakistan or abroad, must sell such foreign currency to an Authorized Dealer within three months from the date of acquisition, stated in Foreign Exchange manual of State Bank of Pakistan.
“Payments in foreign exchange received by an Authorized Dealer on behalf of a resident in Pakistan must not be retained in foreign exchange but must be converted into Rupees unless the State Bank has given general or special permission to the beneficiary to retain the foreign exchange received by him” states Central Bank regulations.
It’s important to note that these regulations do not apply to foreign diplomats and foreign nationals employed in foreign embassies and missions within Pakistan. Furthermore, foreign nationals and foreign businesses are allowed to retain foreign exchange abroad, except for the portion representing their earnings from business conducted in Pakistan or services rendered while in Pakistan.
Additionally, the law permits residents in Pakistan to hold foreign exchange in countries other than Afghanistan, Bangladesh, India, and Israel, as long as the total amount does not exceed US $1000 or its equivalent in other currencies.
Furthermore, Pakistani citizens are allowed to hold Afghan currency, whether within or outside Pakistan.
For the purposes of the mentioned regulations, “residents in Pakistan” excludes Pakistani citizens residing in foreign countries as long as they remain outside Pakistan but includes foreign nationals who continuously reside in Pakistan for at least six months.
Travelling Abroad Limit
As per the SBP limits individuals with age 18 years and above (adults) can now take out of Pakistan foreign currency (FCY) equivalent to USD5,000 per visit, while those below the age of 18 years (minors) can carry out FCY equivalent to USD2,500 per visit. Further, the annual ceiling to take out FCY for adults and minors shall be USD30,000 and USD15,000, respectively.
Limit on Credit Card Transations
SBP has advised banks to ensure that the use of debit/credit cards for international transactions is aligned with the profile of card holders and for their personal needs only. Besides, an annual limit of USD30,000 has been prescribed for individuals for international transactions. It is emphasized that the purpose of debit/credit
cards is to facilitate individuals in making payments for transactions that are of personal nature. The limits on these cards as well as payments through them, both domestic and international, should therefore be aligned with the profile of the card holder. It shall be the responsibility of a customer to ensure that his/ her annual limit is not breached at any time. However, banks are required to monitor these limits on consolidated basis for each individual.
As regards use of cards for cross border transactions for meeting legitimate business related needs, a framework for acquisition of digital services is already available in Para 14A, in Chapter 14 of the Foreign Exchange Manual, in terms of which entities intending to acquire digital services can designate a bank to use this facility as per respective limits defined in the said framework. Besides, a general framework for acquisition of services by firms and companies has been given in Para 11, Chapter 14 of Foreign Exchange Manual.
